Segal, Cohen & Landis Reviews IRS Appointment of ‘Risk’ Officer

Risk Officer Named
Risk Officer Named

In the wake of the controversy surrounding the IRS’ targeting of conservative groups for increased scrutiny, the newly appointed Acting Commissioner, Daniel Werfel, has quickly taken action in response to calls for increased scrutiny of the IRS itself.

Werfel has appointed David Fisher in the capacity of chief risk officer and adviser. Fisher has many years of experience in the fields of financial management and internal controls during his time in several administrative capacities at the Government Accountability Office, according to an email sent internally by Werfel. The GOA is the investigative arm of Congress. His responsibilities included overseeing all internal operations as they related to budget, financial management, human resources, and other such areas.

While at the Internal Revenue Service, Fisher will be responsible for mitigating risk and improving internal controls. The intent of such internal oversight is to restore integrity to the IRS.

According to Werfel, Fisher has been highly regarded as a man of integrity and accountability throughout his career. These qualities are essential to the man who will not only be responsible for internal oversight, but also for advising Werfel on any proposed policy changes.

The IRS has found itself in hot water in recent weeks, as it faces multiple congressional investigations—the result of a revelations regarding the targeting of conservative groups that applied for tax-exempt status during an 18-month period from 2010-2012.

Segal, Cohen & Landis
9100 Wilshire Blvd. Ste. 601E
Beverly Hills, CA 90212
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Segal, Cohen & Landis Reviews Possible IRS Commissioner by Obama

Appointing New Commissioner
Appointing New Commissioner

Daniel Werfel is expected to be named by President Obama to replace Acting Commissioner Steven T. Miller, according to various news outlets. Miller tendered his resignation to President Obama a few days ago.

Background of the expected Acting Commissioner

Mr. Werfel was previously named Controller of the Office of Federal Financial Management of the Office of Management and Budget by President Obama in 2009. Before his appointment to this position, he had served in a few different roles at the Office of Management and Budget—including Deputy Controller, Chief of the Financial Integrity and Analysis Branch; budget examiner in the education branch of the office, and as a policy analyst in the Office of Information and Regulatory Affairs.

Before entering the Office of Management and Budget, Mr. Werful practiced law. At one time, he worked as a trial attorney in Civil Rights Division in the Department of Justice.

Werful has a history of bipartisanship, as he worked in the OMB during the Bush Administration, pushing for support on both sides of the aisle.

Segal, Cohen & Landis
9100 Wilshire Blvd. Ste. 601E
Beverly Hills, CA 90212
(310) 285-3999

Segal, Cohen & Landis Reviews U.S. Senate Subcommittee Questioning of Apple

Apple CEO Tim Cook faced tough questions from a United States Senate subcommittee yesterday about the company’s offshore cash. The subcommittee charged Apple with utilizing tax loopholes in order to dodge taxes in the United States. They claimed that setting up offshore subsidiaries were part of the company’s plan to avoid billions of dollars in taxation.

Cook was quick to deny these claims. He countered by saying that the company is detrimentally affected by tax laws that no longer serve the current economic climate, with its multinational companies attempting to move cash from overseas back to the United States.

Cook vehemently stated that the company pays each and every dollar that it owes to the Internal Revenue Service. He noted that the company’s payments may make it the largest corporate taxpayer in the country. He went on to say that Apple is complies with both the law and the spirit of the law. According to Cook, the company does not depend on tax gimmicks or move intellectual property offshore to avoid tax bills from the Internal Revenue Service.

U.S. Senate Subcommittee

The hearing in which Cook testified on Apple’s behalf was called by the subcommittee’s investigation into loopholes utilized by corporations to avoid corporate taxes. Apple is not the only large company to be questioned. Microsoft and Hewlett-Packard were also asked to appear before the bi-partisan committee led by Carl Levin (D-Michigan) and John McCain (R-Arizona). According to the committee, an investigation into Apple yielded information regarding the company’s tax practices—which, purportedly, include shifting billions of dollars in profits away from the United States and into Ireland. This was apparently done with the purpose of taking advantage of a low corporate tax rate of 2 percent or less that was negotiated. The subcommittee said yesterday that such actions had resulted in the avoidance of tax on over $44 billion in earnings.

Subcommittee co-chair Levin remarked that Apple is focusing on taxes it has paid, and not on the vast quantity of tax avoided.

It is important to note, as does a Forbes article on the topic, the Apple has not done anything illegal. Its tax practices are merely an example of how multinational companies are utilizing tax loopholes. Apple remarks in a statement that the United States Tax Code is now antiquated in the digital age. It has simply not kept pace. Like many taxpayers, those leading Apple propose reform for the tax code, asking that it be simplified so that all taxpayers, and those leaders in Congress who preserve and write it, can understand it.

Segal, Cohen & Landis
9100 Wilshire Blvd. Ste. 601E
Beverly Hills, CA 90212
(310) 285-3999

Segal, Cohen & Landis Reviews Mary J. Blige’s Legal Woes

Another Grammy winner finds herself in tax trouble. This time it’s Mary J. Blige, a taxpayer who is familiar with dealing with the tax woes. As a Forbes article recently pointed out, celebrities will often find themselves with tax problems as a result of their large incomes and their complex lifestyles. Celebrities will find themselves removed from the financial handling of their brand, as advisors and handlers will filter information before bringing it to the celebrity.

Ms. Blige found herself with a New Jersey tax bill of over $901, 000 for back taxes, but this time it is the IRS that is seeking payment. According to TMZ, a lien was filed against Ms. Blige for unpaid income taxes in the years 2009, 2010, and 2011. If the lien information is correct, that leaves the singer with over $3 million dollars owed to the IRS.

If you find yourself with a tax lien, there is some information that you should know. Tax liens are not to be ignored. They can encompass all your property—including property that you acquire after it is filed. Tax liens give the IRS priority over any other creditors that might request payment in the event of unpaid debt.

According to the IRS website, the IRS can only file tax liens after a liability is assessed, the IRS sends a Notice and Demand for Payment saying how much you owe, and you fail to address the issue with payment in 10 days.

If you are seeking to have your IRS lien released, the process usually involves two options in most cases: (1) pay the taxes, interest, and liability; or (2) post a bond guaranteeing payment.

If you find yourself in this position though, it is a good idea to speak to a knowledgeable tax professional.

Segal, Cohen & Landis
9100 Wilshire Blvd. Ste. 601E
Beverly Hills, CA 90212
(310) 285-3999

Grammy Winner Sentenced in Tax Case

Singer  and Grammy Winner Lauryn Hill found herself in trouble with the Internal Revenue Service, as discussed in a previous blog post. Ms. Hill faced a judge on Monday for her failure to pay taxes on earnings that numbered around $1 million, charges to which she pleaded guilty last year. She was sentenced to three months in prison, and three subsequent months in home confinement.

Ms. Hill, in a statement before the judge on Monday, emphatically stated that she had always planned to pay the taxes she owed, but that this was not possible during the time that she removed herself from the music business. This statement was in the same vein as a statement she posted online last year when her tax troubles came to light.

Without an explanation for her actions, Ms. Hill stated that she needed to be able to earn money to support her family, but that she had been unable to do so.

Her attorney previously stated that Ms. Hill had attempted to make payments to satisfy her tax liabilities in regards to both her state and federal taxes. According to him, she has paid over $970,000. Her attorney sought probation, as Ms. Hill was facing up to a year in prison.

Segal, Cohen & Landis
9100 Wilshire Blvd. Ste. 601E
Beverly Hills, CA 90212
(310) 285-3999